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Cars For Sale

RECENT research by ING DIRECT found Australians are cashing in their personal possessions in a bid to boost income. One in ten of us sold some household items over the last year, with more planning to do so in the future.

Selling stuff on eBay or through a garage sale can be a short term money spinner. A 2011 survey by online classifieds site Gumtree for instance, found the average household has almost $4,000 worth of unwanted items.

The trouble is, there's only so much of the family silver you can sell off. If you're serious about putting money back in your pocket, a more lasting solution is to have a look at some of the household's key financial products to check that you're getting the best deal. Shopping around can generate valuable savings each year, which can be worth a lot more than a one-off cash boost.

On a major debt like your mortgage for instance, slicing just a fraction off the interest rate with a cheaper loan can mean big savings on monthly repayments.

The way we manage credit cards can also make a difference to our hip pockets. Sticking to the minimum monthly repayments may seem like a budget-friendly option but take a look at your monthly statement to see how much this is costing you in interest charges.

With card rates averaging around 15% - and plenty charging more than 20% - you could be paying $600 each year in interest on a card balance of, say, $3,000. With our national credit card debt exceeding $50 billion, aiming to pay off as much as you can off the card each month makes good financial sense. Or switch over to a cheaper no-frills card to secure a lower rate.

On the other side of the ledger, a simple way to earn more on your savings is by comparing the deposit rates offered by different financial institutions.

Around 80% of investors with a term deposit simply roll over their savings with the same financial institution once the deposit matures. Many of these people end up earning a miserly interest rate.

In fact, financial comparison website RateCity says Australians are collectively missing out on an extra $4 billion in interest earnings each year because we don't chase higher rate deposits.

If you have a term deposit, make a calendar note of when the investment will mature and allow yourself time to compare the rates available with other financial institutions. For the sake of completing a 100-point identity check with a new financial institution, you could find yourself earning a more generous return on your money.

For large, infrequent costs like home or car insurance, compare policies and premiums rather than just renewing your existing policy. A recent study by research group Canstar found that for some drivers, especially younger motorists aged below 25, the cost of car cover has dropped by up to 13% in the last year.

For more ideas on regaining control of your money and shopping around for the best deal, take a look at my book Making Money.

Paul Clitheroe is a founding director of financial planning firm ipac, chairman of the Australian Government Financial Literacy Board and chief commentator for Money magazine. Visit www.paulsmoney.com.au for more information.